Sri Lankan shares firm up on large caps; lower rates boost sentiment

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COLOMBO, Jan 2 (Reuters) - Sri Lankan shares rose for a seventh straight session to hit a near five-week closing high on Tuesday as investors picked up large caps, with sentiment expected to remain positive after the central bank kept key policy rates unchanged last week.

Turnover stood at 194.6 million rupees ($1.27 million), less than last year’s daily average of 915.3 million rupees.

“It was a typical first day of the new year with the volumes low. But the market is positive after the central bank kept the rates lower and the market rates are coming down,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

The bourse rose 2.26 percent in 2017, posting the first annual increase in three years, after falling 9.7 percent in 2016.

The $81 billion economy grew at an annual pace of 3.7 percent in the first nine months of 2017, which followed its most severe drought in 40 years in the first quarter and the worst flooding in 14 years in May. ($1 = 153.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)